HomeMy WebLinkAboutR-02-0234J-02-203
3/7/02
RESOLUTION NO. of 2 — 234
A RESOLUTION OF THE MIAMI CITY COMMISSION,
WITH ATTACHMENT(S), DIRECTING THE CITY
MANAGER TO REVISE THE PROGRAM GUIDELINES FOR
THE SINGLE FAMILY REHABILITATION AND
HOMEBUYERS FINANCING PROGRAMS BY DECREASING
THE LEVEL OF REHABILITATION FINANCING
ASSISTANCE AVAILABLE IN THE FORM OF GRANTS
OR LOW-INTEREST LOANS FROM $40,000 TO
$25,000 FOR ELIGIBLE HOMEOWNER(S) THAT
OCCUPY THEIR HOME(S) AS THEIR PRINCIPAL
RESIDENCE(S); FURTHER AUTHORIZING THE CITY
MANAGER TO IMPLEMENT AND ADMINISTER THE
PROGRAMS PURSUANT TO PROGRAM GUIDELINES,
ENTITLED "SINGLE FAMILY REHABILITATION
PROGRAM," ATTACHED AND INCORPORATED; AND
DIRECTING THE CITY MANAGER TO PRESENT THE
CITY COMMISSION WITH SPECIFIC PROJECTS, AS
DEEMED APPROPRIATE, FOR REHABILITATION
FUNDING IN EXCESS OF THE MAXIMUM DESIGNATED
IN THE PROGRAM GUIDELINES.
WHEREAS, Resolution No. 99-429, adopted June 22, 1999,
approved and adopted the City's Five -Year Consolidated Plan
(1999-2004); and
WHEREAS, the Five Year Consolidated Plan emphasizes a long
term homeownership strategy
predominately residential
for stabilizing the City's
neighborhoods through the
establishment of seven "Homeownership Zones"; and
A T TA C 11 �,! Ej T (S)
CONTAINED
CITY COM USSIOX
MZEt1NG OF
MAPP, 0 7 2002
Rosolutim rico.
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Lurtj%_Al Eu %-"rY
i •
WHEREAS, another key element of the Five -Year Consolidated
Plan also emphasizes revitalization of a substantial number of
single family homes that fall below minimum housing standards,
owned by low and moderate income homeowners, who lack the
financial capacity or credit -worthiness required to obtain home
repair financing; and
WHEREAS, due to the number of families and individuals
living below the poverty level and the number of over -crowded
and substandard housing units in the City, Resolution No. 99-429
approved the Administration's recommendation to modify the
Single Family Rehabilitation Loan Program to provide home
improvement assistance to homeowners throughout the City in the
form of grants to upgrade properties to safe and sanitary
housing standards, and to remedy existing code violations; and
WHEREAS, with the adoption of Resolution No. 99-429, the
City Commission also approved providing financial assistance to
individuals interested in purchasing a home in the City through
the Homebuyers Financing Program; and
WHEREAS, presently eligible homeowners may receive a
ten year deferred payment loan that is reduced by ten percent
(10 percent) per year as long as the homeowners continue to own
and occupy the properties; and
WHEREAS, due to the increased demand for financial
assistance through the City's Single Family Rehabilitation and
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92- 234
Homebuyers Financing Programs and limited funding resources
available through the State and federal governments, it is
necessary that the City reduce the level of financial assistance
available and implement a grant and/or low interest loan
strategy for both of the Programs; and
WHEREAS, the City Commission is willing to consider
authorizing rehabilitation financial assistance in excess of
$25,000 on an individual project by project basis; and
WHEREAS, certain revisions to the Program implementation
guidelines are necessary to reduce the amount of the financial
assistance available for the acquisition/purchase of single
family residential units which will be repaid upon transfer of
title to the unit or upon refinancing of the unit;
NOW, THEREFORE, BE IT RESOLVED BY THE COMMISSION OF THE
CITY OF MIAMI, FLORIDA:
Section 1. The recitals and findings contained in the
Preamble to this Resolution are adopted by reference and
incorporated as if fully set forth in this Section.
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Section 2. The City Manager is directed to revise the
Single Family Rehabilitation and Homebuyers Financing Programs
by decreasing the level of rehabilitation financing assistance
available in the form of grants or low-interest loans from
$40,000 to $25,000 for eligible homeowner(s) that occupy their
home(s) as their principal residence(s).
Section 3. The City Manager is authorizedL� to implement
and administer the City's Single Family Rehabilitation and
Homebuyers Financing Programs in accordance with the guidelines,
entitled "City of Miami Single Family Rehabilitation Program,"
attached and incorporated.
Section 4. The City Manager is further directed to
present the City Commission with specific projects, as deemed
appropriate, for rehabilitation funding in excess of the maximum
designated in said Program guidelines.
ii The herein authorization is further subject to compliance with
all requirements that may be imposed by the City Attorney,
including but not limited to those prescribed by applicable City
Charter and Code provisions.
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Section 5. This Resolution shall become effective
immediately upon its adoption and signature of the Mayor.?
PASSED AND ADOPTED this 7th day of
ATTEST:
III'SIIIILAA. HOMPSON
CITY CLERK
APPROVL@r-AO Td@r-FORM AN
QA%PNF- VI LARELLO
Y ATTORNEY
W6053:tr:BSS
RRECTNESS:l
March , 2002.
MANUEL A. DIAZ, MAY
21 If the Mayor does not sign this Resolution, it shall become
effective at the end of ten calendar days from the date it was
adopted and passed. If the Mayor vetoes this Resolution, it
shall not become effective unless the City Commission overrides
the veto.
Page 5 of 5
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CITY OF MIAMI
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SINGLE FAMILY
REHABILITATION PROGRAM
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City of Miami
Single Family Rehabilitation Program
The City's Single Family Rehabilitation Program provides homeowner's financial assistance to
rehabilitate owner occupied residential properties located in the City of Miami.
A. Single family, Owner -Occupied House
This Program is appropriate for single family (one (1) unit) houses that are owner occupied.
Eligibility will be determined by the requirements of the funding source based on family income
and the total number of persons in the household.
Total Program Financial Assistance
A maximum of $25,000.00 or the actual cost of the rehabilitation, whichever is less, will be provided
in the form of a 0 — 3% loan repayable at the time of property sale and change of title or at the time
of refinancing which increases the first mortgage principal balance.
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City of Miami
Single Family Rehabilitation Program
(Owner -occupied one (1) unit residences)
Guidelines
Definitions:
Decent Safe and Sanitary Housing- A dwelling unit or building meeting Federal Occupancy
standards as defined in 24 CFR 882.109 and CFR 882.405.
Dwellin Unit - An independent living unit containing, at a minimum, a bathroom, kitchen or
kitchenette and a living area/bedroom.
Hazardous Condition- A code violation that t is an immediate, serious threat to the health and/or
safety of the Occupant of dwelling unit.
Income- The gross amount received from all sources by every person residing in the dwelling
including wages, pension, Social Security, interest, rent, dividends, etc.
income Limits- The maximum amount that can be earned to qualify for a specific assistance
category, based on family size (those actually living at the property) and the median income for
Miami as determined by the Department of Housing and Urban Development.
Owner-Occu ant- The title holder to a residential structure whose primary living unit is located in
the structure.
Residential- A property used only for dwelling purposes. No commercial or office activities are
allowed on the property.
S_inp,le Family Dweiline�A property of (1) dwelling unit.
Program Description:
A. Owner Occupant Single Family House— One (t) Unit.
An income eligible house hold may receive financial assistance to correct a hazardous condition ar
conditions and correct other codes violations. The financial assistance may not exceed the lesser of (1)
the actual cost of rehabilitation or (2) $25,000.00. Financial Assistance will not be made if any
hazardous conditions would remain after rehabilitation. If all hazardous conditions are corrected,
other code violations may be corrected within the $25,000 limit.
Eligibility
1. An applicant must be the owner occupant of a single unit residential property located in
the City of Miami. Priority for program participation will be given to elderly and disabled
applicants.
2. The property must not have received assistance for hosing rehabilitation from the City of
Miami, Dade County or the U.S. Department of Housing and Urban Development during
the previous five (5) years.
3. The applicant must meet the household income requirements of tite funding source.
4. The applicant should have evidence of title of the property to be rehabilitated. The
applicant must satisfy any liens, which may cause foreclosure of the collateral property
prior to loan processing. City of Miami liens, fines, and /or fees must be satisfied and/or
paid off, or in some instances the City may allow the property owner to mitigate or
otherwise resolve the fine/fee with the appropriate City Board or Department. Proof of
same, in writing, must be submitted by the applicant as part of their rehabilitation
application.
S. The applicant should pay all due City, County Federal, and school taxes.
6. 'Cite property must need repairs to meet the decent, safe, and sanitary standard.
7. The property should consist of one (1) owner occupied residential unit.
S. The property must conform to the requirements of the City of Miami Zoning Ordinance.
9. The applicant's credit history for the past twelve month period may not show any
outstanding credit problems.
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Eligible Costs:
All rehabilitation work must be done in the following order:
I. The actual cost of rehabilitation necessary to bring the property to the decent, safe, and
sanitary standard, i.e. correct health and safety violations.
2. The actual cost of rehabilitation necessary to bring the property to South Florida Building
code, i.e. correct code violations.
3. The cost of rehabilitation to correct or remove incipient violations including all physical
conditions of the property which, if not repaired, would deteriorate into actual violations
of the decent, safe, and sanitary standard of the South Florida Building Code within two
years .
4. The cost of building permits and related fees required to carry out the proposed
rehabilitation work, including but not limited to architect and engineering fees.
Inelieible Cost:
L Work so extensive as to be equivalent to new construction or reconstruction of the property.
(This does not exclude so-called "gut" rehabilitation of a property if necessary to meet the
South Florida Building Code.)
2. General Property Improvements.
3. The repair or construction of swimming pools, but not the cost to fill in or eliminate them
from the properly.
4. Materials, fixtures, equipment or landscaping of a type or quality which substantially
exceeds that customarily used in Miami for properties of the same general type as the
property to he rehabilitated.
5. Purchase, installation or repair of furnishings.
6. Cost of acquiring the properly to be rehabilitated.
7. Any reimbursement for work done prior the approval of the financial aid, or contracted for,
either verbally or in writing, prior to the approval of the assistance.
8. Payment of any lien or judgment against the property including back taxes.
Loan Recaptured/Payment
A. Refinance that increases the first mortgage principal balance requires repayment of the
balance of the City's loan,
B. Transfer of the title occurs prior to the expiration of the loan term, due to the followjag.
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Death of Homeowner- heirs to the previous owner can assume the remainder of
the assistance outstanding, providing they have been certified as income eligible
by the City, and the they reside in the house as their primary residence.
2. Sale, Lease, other Transfer of Title- the remainder of the outstanding assistance
must be repaid to the City in one lump sum payment.
Waivers
The Director of the Department of Community Development shall have the authority to waive any
requirements stated in these guidelines other than those required by the funding to further the
purposes and the objectives of the Community Development Program of the City of Miami. All such
waivers shall documented in the applicant file. However, the following item shall not be waived:
A. The requirements that property receiving assistance must meet the rehabilitation standards of 24
CFR 882.109 and 24 CFR 882.405,
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Appendix
Housin Luafity Standards
]-lousing rehabilitated in this program shall meet the Performance Requirements set forth in this
section. In addition, the housing shall meet the Acceptability Criteria set forth in this section.
A. Sanitary Facilities
1. Performance Requirement. The dwelling unit shall include its own sanitary facilities
which are in proper operating condition, can be used in privacy, and are adequate
for personal cleanliness and the disposal system.
2. Acceptability Criteria. A flush toilet in a separated, private room, a fixed basin with
hot and cool running water, and a shower or tub with hot and cold running water
shall be present in the dwelling unit, all in proper operating condition. These
facilities shall utilize an approved public or private disposal system
B. Food Pre aralion and Refuse Disi2osal
1. Performance Requirement. The dwelling unit shall contain suitable space and equipment to
store, prepare, and serve foods in a sanitary manner. There shall be adequate facilities and services
for the sanitary disposal of food wastes and refuse, including facilities for temporary storage where
necessary (e.g., garbage cans).
2. Acceptability Criteria. The unit shall contain the following equipment in proper operating
condition, cooking stove or range and a refrigerator of appropriate size for the unit and a kitchen
sink with hot and cold running water. The sink shall drain into an approved public or private
system. Adequate space for the storage, preparation and serving of food shall be provided.
C. Space and Securitv
_1. Performance Requirement. The dwelling unit shall afford the family adequate space and
security.
2. Acceptability Criteria. A ]riving room, kitchen area, and bathroom shall be present; and the
dwelling unit shall contain at least one sleeping or living/sleeping room of appropriate size for each
two persons. Exterior doors and windows accessible from outside the unit shall be lockable.
D. Thermal Environment
1. Performance Requirement. The dwelling unit shall have and be capable of maintaining a
thermal environment for the human body.
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2. Acceptability Criteria. The dwelling unit shall contain safe heating and/or cooling to each
room in the dwelling unit appropriate for the climate to assure a healthy living environment.
Unvented room heaters which burn gas, oil or kerosene are unacceptable.
E. Illumination and Electricity
1. Performance Requirement. Each room shall have adequate natural or artificial illumination
to permit normal indoor activities and to support the health and safety of occupants.
Sufficient electrical sources shall be provided to permit use of essential electrical appliances
while assuring safety from fire.
2. Acceptability Criteria. Living and sleeping rooms shall include at least one window. A ceiling
or wall type light fixture shall be present and working in the bathroom and kitchen area. At
least two electrical outlets, one of which may be an overhead light, shall be present and
operable in the living are, kitchen area, and each bedroom area.
F. Structure and materials
I. Performance Requirement. The dwelling unit shall be structurally sound so as not to pose any
threat to the health and safety of the occupants and so as to protect the occupants from the
environment.
2. Acceptability Criteria. Ceilings, walls and floors shall not have any serious defects such as
severe bulging or leaning, large holes, loose surface materials severe buckling or noticeable
movements under walking stress, missing parts or other serious damage. The roof structure shall be
firm and the roof shall be weather tight. The exterior or wall structure and exterior wall surface shall
not have serious leaning, buckling, sagging, tracks or holes, loose siding, or other serious damage.
The condition and equipment of interior and exterior stairways, halls porches, walkways, etc. shall
be such as not to present a danger of tripping or falling. Elevators shall be maintained in safe and
operating conditions.
C. Interior Air Quality
_l. Performance Requirement. The dwelling unit shall be free of pollutants in the air at levels,
which threaten the health of the occupants.
2. The dwelling shall be free from dangerous levels of air pollution from carbon monoxide, sewer
gas, fuel gas, dust, and other harmful air pollutants. Air circulations shall be adequate throughout
the unit. Bathroom areas shall have at least one operational window or other adequate exhaust
ventilation.
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H. Water Suaniv
—1. Performance Requirement. The water supply shall be free from contamination.
2. Acceptability Criteria. The unit shall be served by an approved or private sanitary water
supply.
1. Lead Based Paint
_1. Performance Requirement. The dwelling unit shall be in compliance with HUD Lead Based
Paint regulations, 24 CFR, Part 35, issued pursuant to the Lead Based Poisoning Prevention Act, 42
U.S.C. 4801.
2. Acceptability Criteria. Same as Performance Requirement.
J. Access
_I. Performance Requirement. The dwelling unit shall be usable and capable of being maintained
without unauthorized use of other private properties, and the building shall provide an alternate
means of egress in case of fire.
2. Acceptable Criteria. The dwelling unit shall be usable and capable of being maintained without
unauthorized use of other private properties. The building shall provide an alternate means of egress
in case of fire (such as fir stairs or egress through windows.)
K. Site and Neiehborhood
1. Performance Requirement. The site and shall be reasonable free from disturbing noises and
reverberations and other hazards to the health, safety, and general welfare of the occupants.
2. Acceptability Criteria. The site and neighborhood shall not be subject to serious adverse
environmental condition, natural or manmade, such as dangerous walks, steps, instability, flooding,
poor drainage, septic tank back-ups, sewage hazards or mudslides; abnormal air pollution, smoke or
dust, excessive noise, Vibration, or vehicular traffic, excessive accumulations of trash, vermin or
rodent infestation; or fire hazards.
L. Sanitary Condition
1. Performance Requirement. The unit and its equipment shall be in sanitary conditions.
2. Acceptability Criteria. The unit and its equipment shall be free of vermin and rodent
infestation.
M. Enerey Efficient
_1. Performance Requirement. Caulking and weather stripping are required as energy conserving
improvements. Other appropriate energy conserving improvement such as insulation and storm
windows must be accomplished as part of the rehabilitation under this program determines these
improvements to be practicable, cost effective and financially feasible.
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HOMEBUYER'S ASSISTANCE
PROGRAM GUIDELINES
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City of Miami
Homebuyers Assistance Program
Introduction
TIM' City of Miami, Florida is committed to addressing the issue of affordable housing. t„ acti,ctt
seeking various strategies for meetings the homeownership (rousing needs of N ers lost, lo„ .uul
moderate income persons.
The Department of Conrritunit_y Development will implement the 1lonsehuycr's
on a Citywide basis to accomplish the following ubjeclives:
1. Provide Down payment / Mortgage Huy- down and closing cost ;sssi,tsser foz
homebuyers purchasing a newly constructed or existing; home located %�Wlin r. W, Id
Miami limits,
2. To spur rein. estment of private capital in older residential neighhor lstsusi, ;ring
3. To cornplcnrertt other public neighborhood revitalization effort~.
Eligible Mortgagors
Income
The program is designed to benefit very low, low and moderate inconsc farsrilic.,.
Applicant's household gross annual income adjusted for family size must not e.Xcecd 8(P
of the median income published by the U.S. Department of Housing Urban Developmerst
at lime of closing. Current income levels are listed below. Income is calculated on current
and future earnings, taking into consideration future pay -increases. Applicants isho arc
self employed must submit personal and corporate tax turns, year to date Profit :snd boyo
Statements and Balance Sheet.
tJ2- ,34
,_ ���OWN
►. Credit
�• Applicant's credit history for the past twelve moth period oma► nut sbo„ x rlermY;►tori
credit.
Collection accounts must be paid and or resolved. Bankruptcic,s o►u.,t halr lh°('rs
discharged for a period of 24 months.
0
Applicants most have reestablished credit, i.e. FPL, Water. filo dont. p.[rnrr,ut, fjraturi,
will be considered only if verified through a credit bureau.
j Financink
Applicants must be approved for a first mortgage from a r►tor IT, 1".1, IL iirl r
Proposed first mortgage financing arrangements roust he louml acrI,l,t;►Irlr r [Irr i ri;
t The City of Nliarui reserves the right to evaluate and den) mm tk,.,V, iir:;rrrr:u'4 [; f crr
found acceptable and / or beneficial to an applicant or the C'►tr
First mortgage financing in the forrn of "BA"' paper or nekari,t .j�jiorri,a[iu,,
are not acceptable.
(� Adjustable rate mortgages inust be qualified at the highest r ate allw%k a li. rrrr:,,
1♦
1� Lender may not receive or pa) -out "Par Plus" premiwn� in I N%".d- ,I l i to .r
mortgage aninunt.
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First mortgage lender must provide "Home Buyer's counseling' I'r ogl an►_ it iti i crluu i►i
that homebuyers undergo homeowner's counseling sessions ill au rftol r to cnrt:ril flit
• possibility of foreclosure and loss of homeownership status. Cori►.soiiig sc.,tiions roust b
evidenced by certification of completion provided by first mw tgage ;' ruicr
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Escrow
First Mortgage lender must escrow funds for the payment of propert} taxes and proper!)
insurance for the term of the first mortgage. "Non Escrow" loans are not considered
acceptable.
Subsidy
Applicant must qualify for the highest amount possible with the lrst mortgage lendei .
Lender's primary housing ratio must be as close to, but not exceed, 30%, of the household
income. At no time shall the total subsidy, including closing cost, exceed 1525000.
closinlz cost
Maximum clotting costs paid with Ilomebuyer's Program tends is S2.40o i o
Seller Conlribution
Maximum seller contribution towards the transaction n►a� not i xcec. s i, ul lrnr el�:r.;
price.
Qualifying Requirements
In determining the qualification of a household / applicant for SHIP progr,►n, astislunrr.
the City utilizes the following qualifying ratios:
The housing expense to income ratio may not exceed 30'x;, of gross la:,u,r iml,i irrc+i:n.
adjusted for family size, and
The total debt to income ratio may not exceed 45%
The housing expense to income ratio takes into consideration the total n►onthll
Expense of the home being purchased, which includes principal, interest (on first
mortgage), taxes, insurance, and condominium association or homernvners association fees
(if any), and dividing this total by the household's gross monthly income. The result
cannot exceed thirty (30%) percent. Adjustable rate mortgages must be qualified at
highest rate allowed by note.
The total debt to income ratio consist of the addition of the total housing expenses, plus all
other monthly expense, such as credit card payment, personal loans, aulu loans, alimony
or child support and any other monthly expenses that will take more than 12 moths to be
paid off. The total of these expenses is divided by the household total gross income. ']'fit.
result cannot exceed forty live (45%) percent.
1�
Sales Price
Maximum sales price for a newly built unit (never before (jrctipicti) is 5158.855.00.
Maximum sales price for an existing unit is $148,466.00
Documentation
Applications being submitted for consideration must include file fulllntirtl; docunteals,
* Lender Commitment showing terms and conditions of first mortgage. Lender tna%
not receive or pay -out "Par Plus" premiums in exceeds of E .5 of fir rt trit,rt f �l c
amount.
* Uniform! Residential Loan Application (F'.VIVI.A NO;)
application, and final showing corrections and updates.
* Credit Reporl- Tri merge credit reports (three r epusit�„ ; fiats t ni<l,i
Equifax, and Expirian) showing public records.
* 'Verifications of Employment for all employed rnembcrs of 11r, hrin-el,old
* IRS 1040 (for previous 2 years), Profit and Loss and lialal,cc tiheet. I'm self -
employed members of the household.
* Copies of Social Security, Pension or other assistance ticeitLd b� .1111 ,Ilr'nil,c, ,,t
household.
* Verifications of Deposit or copies of bank statements for the nrust , c'cent i, nlulhs.
for all accounts held in the name of or for the benefit of .t1,1 nlrodlt'r. u1 thr
household.
• Proof of sale on any residential property currently aWned hN frr,rrai,wrr s.
* Explanations for derogatory credit during the last 12 months.
* Purchase / Sale Agreement executed by all parties (original) %lith copies of deposit
checks.
* Appraisal- Original with photos, naming City of Miami as lel,de.r (442 with phot(j�
if applicable.)
' * Disclosures- All government disclosures (RESPA), including Good Faith Estimate,
signed within 72 hours of initial loan application.
* Authorization Forms- General release and authorization to eerily :trrd fR5 furnr
4506, executed by all members of the household over the age of 18.
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Applicants should contact City of Miami Housing staff for application intake only when the}
have received a bonafide commitment from first mortgage fender. Applicant %gill be advised
what documentation to bring when they are scheduled to meet with City of Miami flousin"
staff.
Credit documents expire in 90 days, appraisals in 6 moths. A pre -funding quality
control review will be performed on all files being submitted for consideration. The Pity
of Miami reserves the right to request additional documentation in order to complete ils
evaluation of the loan application and to revise and updated this guideline .vithout prior
notification
All applications must be approved by the Director of Community
Development for review and approval by the City of Miami, llonsing
Loan Committee.
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CITY OF MIAMI, FLORIDA
INTER -OFFICE MEMORANDUM
TO: The Honorable Mayorand Members DATE
of the City Commission
SUBJECT:
FROM 2ar�osA. �Gi=z/�c
REFERENCES
E City Manager ENCLOSURES:
RECOMMENDATION:
D. "
FES 216 2002 FILE:
Restructuring of Single Family
Rehabilitation Program
City Commission Meeting
of March 7, 2002
It is respectfully recommended that the City Commission adopt the following legislation relating;
to the restructuring; of the Single Family Rehabilitation Program:
I. A resolution approving guidelines for the restructuring of the Single Family
Rehabilitation Program, in substantially the form attached;
2. A resolution, by a 4/5a' affirmative vote, ratifying, approving and confirming the City
Manager's action that it was advantageous and practicable for the City Manager to enter
into contract with the engineering firm of H.J. Ross and Associates, Inc.,,a firm included
on the Department of Public Works list of approved engineering contractors, to assess the
status, workmanship quality and work needed to be complete the rehabilitation of homes
participating in the Single Family Rehabilitation Program;
3. A resolution, by a 4/5a' affirmative vote, ratifying; approving and confirming the City
Manager's action that it was advantageous and practicable for the City Manager to enter
into contract with the firm of Indigo Service Corporation, a firm included on the
Department of Public Works list of approved construction management contractors, to
manage the completion of rehabilitation work to be completed on homes participating in
the Single Family Rehabilitation Program, as identified through the assessment of H.J.
Ross and Associates, Inc. identified; and
4. A resolution amending the Local Housing Assistance Plan, for submission to the State of
Florida, to implement the State Housing Initiatives Partnership (SHIP) Program in the
City.
BACKGROUND:
At the direction of the City Commission, the Department of Community Development has
conducted a review and analysis of the Single Family Rehabilitation Program. As a result of this
review and analysis, the Administration recommends that the City Commission approve the
guidelines to a restructured Single Family Rehabilitation Program as detailed in the attachment
to the proposed resolution and outlined and this memorandum.
02- 234
The Single Family Rehabilitation Program is designed to provide rehabilitation assistance to very
low, low and moderate- income households currently occupying and maintaining their homes as
their principal residence. Under the Single Family Rehabilitation Program guideline:i in effect
prior to the moratorium, which was officially instituted March 30, 2001 (copy of the
memorandum advising the City Commission of the moratorium attached), providol up to a
$40,000 in financial assistance to rehabilitate the homes of eligible participants.
Through a unique set of circumstances, in the summer of 1999, the City of Miami was in the
unprecedented position of having the opportunity to design and implement a short -tern housing
program to assist its low income residents, including elderly persons on fixed incomers. At the
forefront of this unique set of circumstances was the unexpected identification of a dedicated,
one-time source of funds for this purpose. The City of Miami was in the tenuous position of
having to spend approximately $10 million of State Housing Initiative Partnership (SIS) funds
or face reality that it would have to return its SHIP funds to the State for not meeting timeliness
requirements for the expenditure of State funds. This situation was created as a result of
previously approved SHIP funding commitments to proposed brick and mortar housing projects
that were still in developmental stages and not ready for build out. To complicate the timely
expenditure of funds issue, the regulatory requirements of the SHIP Program mandate -that, to be
eligible for SHIP funding, the property receiving SHIP financial assistance must be occupied by
the end of the timeliness period (two years from the actual allocation date).
As a result, there was a need for the Administration to develop a program that either assisted
income -eligible individuals already living in a house as their primary residence, or income -
eligible families seeking mortgage assistance to provide an opportunity for immediate
homeownership. The existing Single Family Rehabilitation Program at that idme was
restructured by creating a program that provided a $40,000 forgivable loan (in essence, a grant)
over a ten (10) year period to rehabilitate primary residences of income -eligible residents. The
State accepted the City's proposal to spend its SHIP funds and the City Commission approved
the proposed Single Family Rehabilitation Program and Mortgage Assistance Program for First
Time Homebuyers.
The restructured Program, which was primarily intended to correct existing code violations and
focus on addressing health and safety violations (such as electric, plumbing and roof repair
needs), provided the impetus to improve City neighborhoods by completing necessary repairs on
an aging and deteriorating housing stock. It also created an unanticipated limited time funding
mechanism to assist those individuals who could least afford making vital improvements on their
personal residences, particularly elderly persons on fixed incomes.
Given the obvious benefits to income -eligible City residents, the Single Family Rehabilitation
Program proved to be an extremely popular program. A quick look at the historical trends. of the
Program ,clearly demonstrates this popularity. Prior to the implementation of the restructured
Single Family Rehabilitation Program, its predecessor, which provided low interest loans up to
$30,000 to eligibfe participants and grants up to $15,000 for very low-income persons, typically
processed .approximately 20 loans annually. However, in Program Year 2000, this number
increased dramatically to 132 households. As. previously cited, when the application pn)cess was
halted in April prior to the final July suspension, just under 300 other applications had been
O2 21414
received and -were pending review. An additional 18 single-family rehabilitation cases closed in
the first three months of Program Year 2001 prior to the suspension. -
In a very short time period, the Department of Community Development was responsible for
implementing the approved Programs. Despite a program design that was intended to improve
the City's aging and deteriorating housing stock and assist those individuals most in need, there
were inherent dangers in implementing such a progressive program in such an expeditious
manner that surfaced fairly early in the process. Fortunately, the District Commissioners were
keenly attuned to the needs and concerns of their constituents and were able to alert the
Administration about issues they had regarding repairs that had either been completed or were
underway at the homes of individuals in their respective districts. The Administration's review
of specific cases identified by the Commissioners suggested that these concerns may not have
been isolated instances and there was a need for a more intensive review of the Program.
The restructured Single Family Rehabilitation Program went into effect in September 1999.
With the reality that the identified short-term stream of funding for the Program had been
depleted and nearly 300 applications had been submitted for funding consideration, the
Administration had already begun to reevaluate the program design to more realistically
maximize the use of anticipated future funding. Given the obvious funding constraints,
combined with the concerns identified by members of the City Commission, the Program was
suspended and the Administration began an intensive review of the Single Family Rehabilitation
Program.
The moratorium on the Single Family Rehabilitation Program went into effect in March 2001 for
the following primary reasons:
a) The unique funding stream that enabled the City to implement the restructured Single
Family Rehabilitation Program had been depleted and it was necessary to reevaluate the
City's ability to realistically continue the restructured program, particularly in light of
the backlog of approximately 300 applications.
b) Members of the City Commission and the Administration received a series of complaints
regarding the quality of the workmanship, treatment of participants by contractors and
City staff and the extraordinary time to complete the renovations
c) Concerns regarding the quality and diversity of contractors participating in the program
d) Development of systems to ensure quality control, evaluation and assessment of general
contractor's work performance and homeowner's satisfaction.
A cursory review by the Administration substantiated Items b, c and d above and provided the
impetus and insight to confirm that it was critical to take immediate action, including a complete
assessment of the Single Family Rehabilitation Program. This immediate action also resulted in
the dismissal he
reassignment of several staff members assigned to the Program. In addition,
the Administration contacted federal, state and municipal law enforcement agencies to conduct
an in depth investigation to determine if their were any illegal activities or criminal involvement
02- 234
relating to the Program. However, the intent of this Report is not to address the issues relating to
the criminal investigations. These matters remain in the capable hands of the professional law
enforcement agencies that are conducting the appropriate investigative activities. The purpose of
this Report is to discuss the programmatic and systemic issues of a Program that is extremely
important and beneficial to income -eligible City residents, so that services can be, restored
through a realistic and restructured Program.
The Administration has completed a 100% review of all 171 Single Family Rehabilitation
Program cases closed between 1999 to the present. This assessment was comprised of a 100%
independent review of each loan that included:
• Complete Review of the file
• All financial records
• All bid specifications
• Personal interviews with the Homeowners
In addition to the staff research, it is interesting to note that the District 5 Commissioner
conducted a survey of District 5 households participating in the Single Family Rehabilitation
Program. The results of the survey are consistent with the concerns identified by staff in its
review of the Program. Staff has also worked closely with each, individual City Commissioner
in an effort to resolve concerns of constituents throughout the community relating to 1he Single
Family Rehabilitation Program.
Following is an overview of significant systemic deficiencies identified during the
Administration's review:
• The City of Miami was not included in the contracting process — The rehabilitation
contract was an agreement executed between the homeowner and the contractor. This
made it difficult for the City to legally protect program participants from actions of
contractors (such as the placement of mechanic liens). As a result, elderly p<<rticipants
who were unfamiliar with the building process were particularly vulnerable to
contractors.
• Contradictions on Work Write-ups - While the City is responsible for signing off on
payments along with the homeowner, there were obviously verbal side agreements on
numerous occasions between homeowners and contractors that contradicted approved
work write-ups.
• Procurement Process — A file review indicates that three (3) bids were not used on
numerous occasions. There was a tendency to use the same contractors over and over
again. Since contractors participating in the Single Family Rehabilitation Program were
small firms, they operated with limited manpower and available cash flow. This
contributed to constant work delays because the small contractors did not have the
manpower do work on multiple projects simultaneously.
• Contractor Issues — In reviewing contractors selected by homeowners to complete the
rehabilitation work, it was noted that larger contractors were reluctant to bid on the single
family rehab cases. A significant number of the smaller contractors participating in the
Program used "qualifiers" to be eligible to contract for the rehabilitation work. In the
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staff review, it is also important to note that there is an issue regarding the diversity of
contractors participating in the program.
• Segregation of Responsibilities -- In the Administration's review, it was clear that there
was a systemic weakness in the segregation of responsibilities regarding the procurement
process and the payment of invoices for completed work. The Inspections Unit from the
Department of Community development was responsible for the initial work write-up,
coordination of bids and then the actual inspection and approval of rehabilitation work
for payment.
• Inexperienced City staff — The immediate impact of an expended caseload in the Single
Family Rehabilitation necessitated the concurrent expansion of the Inspections Unit and
Management Team for the Program. In retrospect, it is apparent that the volume of work
and parallel responsibilities were overwhelming, creating inherent problems naturally
associated with rapid expansion. Despite the professional background of the staff, there
was an immediate need to plunge directly into the work to meet the demands of the
expanded caseload. With an increase of homeowner complaints regarding their
renovations, more and more time had to focus on complaint resolution, which further
inhibited the staff performance.
• Questionable Work Ethics — Again, as previously stated, this Report does not focus on
investigative matters that have been referred to the appropriate law enforcement agencies.
However, it is important to note that the Administration turned over information to the
investigators of identified concerns and questionable ethics relating to staff members,
contractors and homeowners. As previously cited, City personnel involved in the
management of the Single Family Rehabilitation Program were either dismissed or
transferred.
• Questionable Workmanship -- Based on the sheer number of complaints regarding the
quality of workmanship, it was obvious that this was a significant problem. The
Administration initiated specific actions to address this issue that will be discussed in
more detail later in this memorandum. Again, suspected cases of potential fraud were
forwarded to the appropriate law enforcement agencies.
In completing its assessment of the Single Family Rehabilitation Program, the primary focus of
the Administration centers on the following concerns:
1. Resolution of issues identified from previously approved Single Family Rehabilitation
Program cases
2. Continuation and completion of those issue -free Single Family Rehabilitation Program
cases in process and other cases that had closed prior to the moratorium and were ready
for construction
3. Realistic restructuring of the program to maximize the use of anticipated funding and
address systemic weaknesses
Interim Actions to Address S eciric Homeowner Concerns
The immediate concern of the Administration is to resolve homeowner issues and complaints
identified during the review. As previously mentioned, the Administration completed a 100%
review of the 171 Single Family Rehabilitation Program cases from 1999 to the present. In
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completing its assessment, it was determined that 81 of the cases were issue free. These issue -
free cases included rehabilitation projects in which construction was in -process and there were no
homeowner complaints and/or those loan/grants that had closed prior to the moratorium and
were in the process of identifying contractors to begin the work and/or rehabilitation projects that
had been satisfactorily completed. The 81 issue free cases were assigned to a new MEaiagement
Team to coordinate the effective completion of these rehabilitation projects.
The remaining 90 cases were comprised of rehabilitation loans that were identified to have any
issue, regardless how minor or major. Basically, these cases fit into one or more of the following
categories:
• Concerns relating to workmanship
• Delays in construction
• Concerns of owners with staff and/or contractor attitudes
• Those cases identified to have potential criminal involvement
• All homeowners submitting surveys through the District 5 Survey
• All complaints received by individual City Commissioners or the City Administration
These cases were assigned to H.J. Ross Associates, Inc., the independent engineering firm which
has been contracted to perform a comprehensive evaluation and inspection of the 90 cases
meeting the above criteria. The engineering firm was contracted to perform a complete review
of each file to:
• Determine the work to be completed in accordance with the Original Work Write-up
• Evaluate any change order included in the file
• Inspect the property to determine quality of the workmanship, identify outstanding
construction issues still in need of completion and provide a cost to complete these
items, cost analysis of invoices paid versus the work performed, confirm that appropriate
services were provided for invoices that were paid by the City, ensure that estimates
were reasonable and other inspection related services.
The Administration has also contracted the services of Indigo Services, Inc. to provide
Construction Management services to complete the necessary work to satisfactorily complete the
repairs identified in the final report issued by H.J. Ross Associates, Inc. Indigo is responsible for
completing the renovations cited in the Ross report. It is important to understand that the
rehabilitation work identified by H.J. Ross and eventually remedied by Indigo includes those
items included under the terms of the contract for the original write-up and is not intended to
create additional work that was not included in the initial approval. The only deviation from this
procedure would be if it is determined that poor workmanship from the original repair resulted in
additional damages that must be remedied.
The proposed legislation to this memorandum includes individual resolutions, ratifying,
approving and confirming the City Manager's action that it was advantageous and practicable for
the City Manager to enter into contract with the engineering firm of H.J. Ross and Associates,
Inc. to assess the status, workmanship quality and work needed to be complete the rehabilitation
of homes participating in the Single Family Rehabilitation Program and Indigo Service
02— 234
Corporation -for construction management services to manage the completion of rehabilitation
work, as identified through the assessment of H.J. Ross and Associates, Inca Both organizations
are included on the approved contractor lists of the Department of Public Works.
Pro used Restructurin of the Single Family Rehabilitation Program
With systems in place as detailed above to resolve outstanding issues relating to loan/grants
previously closed under the guidelines of the revamped Single Family Rehabilitation Program in
September 1999, the next important step is to create a realistic restructuring of that program to
maximize the use of anticipated funding and address systemic weaknesses identified during the
comprehensive assessment of the Program.
In developing this strategy, it is important to recognize that SHIP funds used to create the
progressive Single Family Rehabilitation Program that provided loan/grants of $40,000 basically
represented five years of SHIP allocations totaling approximately $10 million. It is impractical
to think that this amount of funding will be available from this point forward. With
administrative safeguards in place to properly manage the City's SHIP allocation to ensure that
funds are not in jeopardy due to the untimely expenditure of funds, it can be anticipated the
annual SHIP allocation will be in the neighborhood of $1.7 - $2 million, including administrative
costs. The Administration recommends that the City Commission continue a policy of directing
the City's annual SHIP allocation to the Single Family Rehabilitation Program. This will
provide a consistent funding base to implement the Program. While the Administration will
actively seek alternate sources to supplement this funding pool, the SHIP allocation will provide
a designated and constant source of funds to administer the Single Family Rehabilitation
Program. It will also enable the City of Miami to effectively expend its SHIP allocation on a
timely basis.
The attached proposed guidelines to the Single Family Rehabilitation Program include a more
detailed description of the Program, but the following information is intended to provide an
overview of the salient points of the proposed restructuring:
Funding Limitations: As previously stated, when the moratorium of the existing Single Family
Rehabilitation Program was initiated, the program guidelines provided a $40,000 forgivable loan
at zero percent interest to income eligible owner -occupied residences. The loan was forgiven on
a 10% pro rata basis for a ten (10) year period. Under the restructured guidelines, it is
recommended that the loan amount be reduced to a maximum of $25,000.
Target Population: Obviously, eligible participants of the Single Family Rehabilitation
Program must meet the income requirements of the funding source, which for the most part is
anticipated to be the SHIP Program. However, it is further recommended that the available
funding pool directed to income eligible homeowners most in need, with a priority given to the
most vulnerable target group, the elderly and disabled.
It is recommended that prioritization of financial assistance under this Program strategy be
provided to elderly homeowners, 62 years or older, and disabled homeowners in the form of a
zero percent (0%) deferred payment loan secured by the property. The loan will be forgiven on a
02- 234
pro -rata basis of ten percent (10%) per year for a ten-year term, as long as the applicant
homeowner continues to own and occupy the property. If the homeowner dies and an income
eligible heir inherits the property during the ten (10) year period, the heir will be allowed to
assume the mortgage, provided that the heir becomes the owner -occupant. Otherwise, the
remaining portion of the loan must be repaid in its entirety, less the forgiven pro rata share while
the eligible homeowner lived in the residence.
Financial assistance to other eligible homeowners will be provided in the form of a loiv interest
loan ranging from zero percent (0%) to three percent (3%) for fifteen (15) years based on the
homeowner's income and household size. A maximum of up to $25,000 in financial assistance
will be available under this strategy for homeowners who reside and maintain the property as
their principal residence. Priority will be given to those eligible clients with the greatest need.
Eligible Program Components: The purpose of the Single Family Rehabilitation Program is to
provide financial assistance to eligible homeowners to solidify the existing housing stock in the
City of Miami and ensure that homeowners may live in safe, decent and sanitary standards void
of health and safety violations.
To meet this objective and maximize the use of available funds, it is recommended that the
program guidelines be limited to the actual cost of rehabilitation to correct code violations to
bring the property to the South Florida Building Code and/or remove incipient violations,
including all physical conditions of property which, if not repaired, would deteriorate into actual
violations of the decent, safe and sanitary standards of the Code. This would primarily include
deficiencies in electrical systems, plumbing and roof repairs. The cost of building permits and
related fees required to carry out the proposed rehabilitation would also be eligible under the
Program guidelines.
Under the restructured program, the cost of General Property Improvements would not be an
eligible activity.
Program Implementation Design: The Administration proposes significant revisions in the
management of the program to address systemic weaknesses identified in the Review and
strengthen programmatic areas discussed earlier in this memorandum:
• Tri -party Agreement — The Tri -Party Agreement between the homeowner, contractor and
City will provide the legal leverage to enable the City to play a more pro -active role in
advocating for the homeowner and interacting with the contractor.
Procurement Process - Under the proposed restructuring of the Single; Family
Rehabilitation Program, the procurement process will include bid solicitation to establish
a certified list of eligible contractors similar to the lists currently used for professional
service_ s by the Department of Public Works. The approved homeowner will then be
given the option of selecting a certified contractor from the approved lia or the
opportunity to select an independent contractor. However, if the homeowner chooses a
contractor not included on the certified list, the contractor must go through a certification
procedure to be added to the list of eligible vendors. This will ensure that appropriate
02'- 234
workmanship standards are maintained for all contractors participating in the Single
Family Rehabilitation Program. Failure to meet the workmanship standards will result in
termination from the certified list. In addition, this process will further ensure that the
contractor list is representative of the ethnic and cultural diversity of the community.
• Internal Control Procedures — The Administration's review clearly pointed out the need
to establish procedural revisions to address internal control issues and the segregation of
responsibilities. From a philosophical perspective, these changes will not only protect
clients of the Single Family Rehabilitation Program, but it will further protect the
management staff administering the program. The assessment determined that there was
a need to define the responsibility of City staff and establish an independent review to
safeguard the integrity of the Program. Under the existing guidelines, the Inspections
Unit from the Department of Community Development was responsible for the initial
work write-up, coordination of bids and then the actual inspection and approval of
rehabilitation work for payment.
Under the proposed restructuring of the Single Family Rehabilitation Program, the
Inspections Unit from the Department of Community Development will maintain its
responsibility to develop the initial work write-up. However, an independent engineering
firm will be contracted to certify the City's cost estimate, manage the procurement
process and coordinate the construction management activities. The Inspections Unit
from the Department of Community Development will also continue its inspection
responsibilities. The homeowner, engineering firm and the Inspection Unit will sign the
approval for the payment attesting that the rehabilitation work has been completed. The
Finance Unit of the Department of Community Development will then process payment
requests. These internal controls are intended to safeguard the integrity of the Program,
ensure that the quality of the workmanship will meet the needs of the homeowner and
protect the management team administering the program.
The Administration is confident that the proposed revisions to the Single Family Rehabilitation
Program will be effective in meeting the needs of needy citizens and maintaining the housing
stock in the City of Miami.
Authorization to Submit the Revised SHIP Plan to the State of Florida for Approval
Finally, in revising the Single Family Rehabilitation Program, it is also necessary to amend the
previously approved Local Housing Assistance Plan, for submission to the State of Florida, to
implement the State Housing Initiatives Partnership (SHIP) Program.
In 1992, the William E. Sadowski Affordable Housing Act established the State Housing
Initiatives Partnership (SHIP) Program, which is administered by the Florida Housing Finance
Agency. SHIP Program funds are derived from set-aside allocations from documentary stamp
levies on real estate transactions statewide.
In order to receive funding through the SHIP Program, each unit of local government
participating in the SHIP Program must submit a Local Housing Assistance Plan to the State of
02- 234
Florida. The Local Housing Assistance Plan essentially outlines how they -City proposes to utilize
the funds received from the State of Florida through the SHIP Program. The legislative body
must amend the Plan if the entitlement recipient revises its housing programs.
It is recommended that the City of Miami Local Housing Assistance Plan be amended oto address
the programmatic changes previously outlined. The changes impact the following SHIP funded
programs as detailed:
1. Single Family Rehabilitation Program
The Program will provide rehabilitation assistance to very low, low and moderate
income persons and the elderly who occupy and maintain single-family residences in
the City of Miami. Prioritization of financial assistance under this Program strategy
will be provided to elderly homeowners 62 years or older and disabled horneowners
in the form of a zero percent (0%) deferred payment loan secured by the property,
and will be forgiven on a pro -rata basis of ten percent (10%) per year for a ten-year
term, as long as the applicant homeowner continues to own and occupy the property.
Should the homeowner die and an income eligible heir inherits the property during
the ten (10) year period, the heir will not be required to repay the pro -rata balance,
but will be allowed to assume the mortgage provided that the heir becomes the
owner -occupant.
Financial assistance to other eligible homeowners will be provided in the form of a
low interest loan ranging from zero percent (0%) to three percent (3%) for fifteen
(15) years based on the homeowner's income and household size. A maximum of up
to $25,000 in financial assistance will be available under this strategy for
homeowners who reside and maintain the property as their principal residence.
2. Homebuyers Financing Program
The Homebuyers Financing Program will provide down payment/closing costs
and/or second mortgage financing assistance to qualified very low, low :moderate
income persons and the elderly to assist in the purchase of newly constructed
affordable homeownership housing units developed by not-for-profit housing
corporations, private developers or the purchase of an existing residential property
located within the corporate limits of the City. To qualify for financial assistance
under this strategy, homebuyers must have received a commitment from a first
mortgage lender for the purchase of the residential unit. The property must be owner
occupied. Financial assistance will be provided in the form of a low interest loan at
three (3%) to five (5%) percent interest over a fifteen (15) or twenty (20) year period,
secured by the property. The financial assistance provided will be due and payable
to the City if the property is leased, sold to a subsequent homebuyer or upon
refinancing by the current homeowner. A maximum of $25,000 in financial
assigtance will be available to homebuyers who reside and maintain the property as
their principal residence.
Other aspects of the previously approved local Housing Plan remain the same.
02- 234
It is recommended that the City Commission adopt the four proposed rdsolutions that:
Approve guidelines for the restructuring of the Single Family Rehabilitation Program, in
substantially the form attached;
• By a 4/5h affirmative vote, ratify, approve and confirm the City Manager's action that it
was advantageous and practicable for the City Manager to enter into contract with the
engineering firm of H.J. Ross and Associates, Inc., a firm included on the Department of
Public Works list of approved engineering contractors, to assess the status, workmanship
quality and work needed to be complete the rehabilitation of homes participating in the
Single Family Rehabilitation Program;
• By a 4I5`'' affirmative vote, ratify, approve and confirm the City Manager's action that it
was advantageous and practicable for the City Manager to enter into contract with the
firm of Indigo Service Corporation, a firm included on the Department of Public Works
list of approved construction management contractors, to manage the completion of
rehabilitation work to be completed on homes participating in the Single Family
Rehabilitation Program, as identified through the assessment of H.J. Ross and Associates,
Inc. identified; and
• Amend the Local Housing Assistance Plan for submission to the State of Florida to
ensure the City's continued participation in the SHIP Program.
0�
DB/GCW/DF
02- 2,34
NOTICE OF PUBLIC HEARING RELATING
TO COMMUNITY DEVELOPMENT ISSUES
4h5i. QF~
area It s,n
The Miami City Commission will hold a Public Hearing to discuss issues relating to the Community
Development Block Grant Program (CDBG). The Public Hearing will be held:
Thursday, March 7, 2002
City of Miami Commission Chamber
3500 Pan American Drive
Miami, Florida 33133
The City Commission Meeting Agenda will include the following items relating to the CDBG Program:
I. Discussion and proposed resolution on Planning Calendar for 28'h Year CDBG and other HUD
program activities, including policies relating to the 280' Year Request for Proposals Process
2. Discussion and proposed resolutions relating to the restructuring of the Single Family
Rehabilitation Program and amended Local Housing Assistance Plan, for submission to the State
of Florida, to implement the State Housing Initiatives Partnership (SHIP) Program in the City
Interested individuals are encouraged to attend this Public Hearing. The meeting site is accessible to the
handicapped.
(AD NO.
02-- 234
GIN OF MIAMI, FLORIDA
INTER -OFFICE MEMORANDUM
TO: The Honorable Mayor
and Members
Of the City Commission
Dare
r
SUBJECT
FROM:
&grids A. Gimenez
City Manager Y
REFERENCES:
ENCLOSURES:
t,M � 200!
FILE:
Moratorium on Application Intake
Single Family Rehabilitation and
Homebuyers Financing Programs
At its meeting of September 28, 1999, the City Commission adopted Resolution No. 99-705 that
approved the City's revised Local Housing Assistance Plan for implementation bf the State
Housing Initiatives Partnership (SHIP) Program for the periods covering fiscal years 1995
1998 and 1998 — 2001.
With the adoption of the aforementioned Plan, the City was able to expand its housing assistance
benefits to very low, low and moderate income families and elderly residents residing in the City
Of Miami through the Single Family Rehabilitation and Homebuyer's Financing Program. The
Single Family Rehabilitation Program provides rehabilitation assistance to very low, low and
moderate income households that currently occupy and maintain their homes as their principal
residence. The Homebuyer's Financing Program provides down payment, closing costs, or
second mortgage financing assistance to qualified very low, low and moderate income
households to assist in the purchase of newly constructed or existing residential properties within
the corporate limits of the City. A maximum of up to $40,000 in financial assistance rt
to eligible households through both programs. is available
The revised Local Housing Assistance Plan was specifically drafted to implement a housing
strategy to address the under expenditure of the City's prior year SHIP allocations, which were in
jeopardy due to the spending requirements for SHIP funds. As a result, the Department of
Community Development initiated aggressive marketing and recruitment efforts to maximize the
expenditure of SHIP finds'and ensure' that City residents benefited from the City's allocation
from the State. This initiative has been extremely successful and the Single Family
Rehabilitation and Homebuyer's Financing Programs have provided much needed assistance to
very low, -low and moderate income households in stabilizing the existing housing stock and
creating homeownership opportunities in the City of Miami. Since October 1999, approximately
338, very low, low and moderate income households have been provided financial assistance to
carry out much needed home improvements or purchase a home in the City at an estimated cost
of over $10 million.
The key to the Department of Community Development's success in implementing the Single
Family Rehabilitation and Homebuyer's Financing Programs has been the funding pool that was
available from underexpended funds from previous SHIP allocations. However, the reserve
funds, that had been available to support these programs are no longer available and the
Administration must reassess the current structure of these programs in conjunction with the
reality of existing funds available to support them.
02. 234
Available SHIP funds for the Single Family Rehabilitation and Homebuyer's :Financing
Programs have been drained. The City of Miami will receive an additional $1.7 millio'F Eremite
2001-2002 SHIP allocation July 1, 2001, which can support these programs. At the Sri
ial City
Commission meeting of February 15, 2001, the City Commission adopted Resolutiori No. 01_
153 that allocated $3,000,000 in prior year Home Investment Partnership (HOME) program
funds to address the increased demand for home improvement and homebuyer's assistance
available to City residents. The Department of Community Development is currently PI-ocessing
between 300-350 appH=tions received from homeowners and/orroe
p pective homebuyers
seeking financial assistance from the City through the Single Family Rehabilitation and
Homebuyer's Financing Programs. Although this infusion of HOME funds will enable the City
to provide assistance to some households currently in the pipeline,
necessary to fully satisfy the funding requests of these applicants underethe ex sting ty lacks the funding
f
these Programs
As a result, it has become necessary to immediately institute a moratorium on new applications
from households seeking assistance through the City's Single Family Rehabilitation and
Homebuyer's Financing Programs until other revenue sources are identified. Additionally, this
will enable the Department of Community Development to address the following issues:
a) Process and expedite current backlog of applications to determine the funding tlIat will
be needed to meet the requests of qualified applicants.
b) Restructure the Programs to realistically conform to available funding levels.
c) Identify alternate sources of funds to maximize participation in the programs.
Simultaneously, the Administration will also be conducting a qualitative assessment of the
Single Family Rehabilitation Program to address the following related issues:
1. Solicitation and recruitment of general contracting firms to expand the pool of qualified
companies and to ensure minority participation and diversity.
2-- Development of systems to ensure quality control, evaluation and assessment of general
contractor's work performance and homeowner's satisfaction.
The moratorium will remain in effect until such time as the Administration is able to address the
funding related issues. The.Single Family Rehabilitation and Homebuyer's Financing Programs
have been extremely effective in improving and maintaining the existing housing stock in the
City of Miami and creating homeownership opportunities for low and moderate income families.
The Administration is hopeful that it will be successful in its efforts to identify alternate sources
of funds to reinstate the programs and continue its efforts to provide these valuable services to
eligible City residents.
If you have any questions or require additional information regarding this matter, please do not
hesitate to contact me.
lelo W/JBH
02-- 234